Renewed Optimism Sparks Rally at Pakistan Stock Exchange

Enthusiasm made its way back to the Pakistan Stock Exchange (PSX) as investors responded positively to reports that the United States President had indicated a truce between Iran and Israel. The KSE-100 Index experienced a surge, climbing nearly 5,900 points during Tuesday’s trading session.

As of 11:30 am, the benchmark index stood at 122,045.62, marking an increase of 5,878.15 points, which translates to a 5.06% rise.

Trading at the PSX was temporarily suspended for one hour following the 5% surge. The market resumed its operations at 12:31 pm.

A notification stated, “All TRE Certificate Holders are hereby notified that a Market Halt has been activated according to PSX Regulations due to a 5% rise in the KSE-30 index from the previous trading day’s close. Consequently, all equity and equity-based markets have been temporarily suspended.”

Widespread buying activity was evident across several key sectors, notably automobile manufacturing, commercial banking, oil and gas exploration, oil marketing companies, power generation, and refineries. Major stocks such as HUBCO, ARL, SSGC, PSO, MARI, OGDC, PPL, POL, UBL, and HBL all showed positive movement.

According to Sana Tawfik, Head of Research at Arif Habib Limited (AHL), “The buying rally at the stock exchange is being fueled by the ceasefire announcement and a 3-4% decrease in global oil prices.”

She further commented, “The market is showing confidence that the geopolitical landscape will stabilize.”

On Monday, the PSX faced significant selling pressure amidst growing geopolitical instability after a US strike, leading to the KSE-100 Index closing nearly 3,900 points lower.

The KSE-100 Index concluded Monday’s session at 116,167.47, reflecting a decrease of 3,855.77 points, or 3.21%.

Globally, stock markets rebounded, and the dollar weakened on Tuesday after the US President suggested a ceasefire agreement, which caused a sharp decline in oil prices as concerns about supply disruptions eased.

Earlier, an Iranian official confirmed Tehran’s agreement to a ceasefire; however, Iran’s foreign minister stated that hostilities would only cease if Israel halted its attacks.

Oil prices experienced a decline of over 3%, adding to the 9% drop on Monday when Iran’s retaliatory action against a US base proved minimal, signaling an end to immediate conflict.

With the immediate threat to the crucial Strait of Hormuz seemingly resolved, U.S. crude futures decreased by 3.4% to $66.15 per barrel, marking the lowest price since June 11.

Risk-linked assets rallied, with S&P 500 futures increasing by 0.6% and Nasdaq futures rising by 0.9%.

EUROSTOXX 50 futures saw a 1.3% increase, while FTSE futures rose by 0.4%.

The MSCI’s broadest index of Asia-Pacific shares outside Japan increased by 1.8%, and Japan’s Nikkei rallied by 1.4%.

This information constitutes an intra-day market update.